US edges towards mobile antitrust case

Calls for an investigation into monopolistic practices by US mobile operators have been answered with a review by the Justice Department that could quickly turn into an investigation.

On Monday the chair of the Senate antitrust subcommittee, Herb Kohl, wrote to the FCC and the Justice Department, regarding operators abusing their power through exclusive handset deals, price matching and refusal to make roaming agreements. Now the Wall Street Journalreports that the Justice Department has launched a review of the matter.

Herb Kohl's letter pointed to increases in the cost of text messaging as an indicator of the risk America is taking by having so few companies with such market share. He described it as a "warning sign for the state of competition in the cell phone market", and called for mandated roaming to allow smaller companies to compete more effectively.

We've had calls for mandated roaming in the UK too. But it is more complex in the US, where the lack of a single mobile standard complicates things, though wildly different levels of coverage make intra-country roaming much more important.

The FCC is already examining exclusive handset deals, to see if they unfairly benefit the larger operators. This follows a letter on the issue from Senator Kerry, so the operators should be suitably on edge by now anyway.

Exclusive deals do lead to cheaper handsets, which is what consumers want. But price matching is certainly cheating, even if it's not the result of any formal meeting between the operators. Christine Varney, antitrust chief at the Justice Department, hasn't launched an investigation yet, but it won't take much evidence of anticompetitive behaviour to trigger one. ®